Armenia Telecommunications Report 2016

About This Report

Abstract:

U-COM s acquisition of Orange Armenie is likely to proceed very quickly, given U-COM s alleged links to the government and Orange s eagerness to sell. The resulting entity will create the most powerful rival to incumbent ArmenTel, the only other multi-service provider in the country. ...It will be interesting to see how market leader VivaCell MTS responds in the coming months. Investment in new infrastructure and services will not be cheap, however, and the low consumer spending power in Armenia suggests that Armentel and Orange will struggle to win customers and secure a timely return on investment. Multi-play will also prove to be ARPU-dilutive, putting further pressure on all players. ...Investment in new infrastructure and services will not be cheap, however, and the low consumer spending power in Armenia suggests that Armentel and Orange will struggle to win customers and secure a timely return on investment. Multi-play will also prove to be ARPU-dilutive, putting further pressure on all players.

...Armenia s wireline market for voice and internet services has only recently benefited from the introduction of competition to challenge the dominance of incumbent AmenTel. Two clear challengers have already emerged: Rostelecom is developing a fibre-to-the-home (FTTH) and gigabit passive optical network platform that is being marketed aggressively in the largest cities and to enterprises in particular. ...Armenia s wireline market for voice and internet services has only recently benefited from the introduction of competition to challenge the dominance of incumbent AmenTel. Two clear challengers have already emerged: Rostelecom is developing a fibre-to-the-home (FTTH) and gigabit passive optical network platform that is being marketed aggressively in the largest cities and to enterprises in particular. Privately- owned U-COM is blazing a similar trail, but boasts a larger customer base in the internet market and could, therefore, do well by moving into the mobile market by buying Orange. ...The incumbent has half a million voice customers versus the newcomers several thousand. Nevertheless, BMI believes these companies are worth watching, not least for their triple- and quadruple-play ambitions.

...Although the newcomers are growing their voice customer bases, they are generally cannibalising ArmenTel s business and, as the low-cost mobile phone obviates the need for a relatively expensive fixed line, so the wireline market is forecast to decline, albeit slowly. ArmenTel is expanding its xDSL wireline broadband network as well as investing in FTTx technology. ...

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